In the final extended hours of trading on Friday the price action moved from 2973 down to 2967. While this may seem insignificant to many, this was technically damaging for many reasons:
1) Neckline broke on a H&S pattern that implies a move below the previous ATH level of 2960 (shown as dashed purple line)
2) The VIX broke out and closed above its current falling wedge
3) 2978 now becomes a significant level for bears to defend as a potential bottom of wave (i) of the correction
4) The lower low means the butterfly pattern from (B) to (C) to 1 as shown in the chart will probably complete, implying a PT of 2933
Completing the butterfly pattern is also the .786 retrace of the leg from Jun 26 to July 15, which sets up ANOTHER potential butterfly pattern to complete at 2880. Why's this bad? Without nerding out too much about harmonics, butterfly patterns retrace at .786-.886 followed by a bounce, then ultimate end at a lower low between the 1.272-1.424 extension. This is important because unlike Gartleys or Bats that reverse between .786 - 1.0, butterfly reversal zones are always at a lower low. Seeing all these potential butterfly patterns also reaffirms my thesis that we are in the corrective wave of an expanded flat.. where the PT is at the 1.236 extension or greater, pretty close to where butterflies terminate.
Which leads to my previous target of 2870-2880 leading up to the July FOMC meeting which would be the 1.272 retrace of the (A)(B)(C) shown. That target will be reaffirmed if we tap the .786 retrace at 2933 this week.
Note the red box shown in the chart. I believe this is gonna be a massive bulltrap, BUT IF AND ONLY IF price hits 2933 first. People will be buying like mad and covering shorts like crazy because they'll think 1) We're back above the old ATH, 2) We've moved above the (i)(ii) and invalidated the impulse down so the ABC correction is over. In fact, a move to 2988 followed by a close below 2977 would only reaffirm an imminent move down to 2870. This is all conjecture of course, bulls could simply give up the fort at 2977.
I wouldn't pay too much attention to the wave lines I've drawn in the chart, they're there more to estimate pivot points as opposed to trajectory. For instance I have no idea whether wave (v) will terminate before or after the fed meeting or maybe wave (iv) will just be a consolidating premium burning corrective wave.
1) Neckline broke on a H&S pattern that implies a move below the previous ATH level of 2960 (shown as dashed purple line)
2) The VIX broke out and closed above its current falling wedge
3) 2978 now becomes a significant level for bears to defend as a potential bottom of wave (i) of the correction
4) The lower low means the butterfly pattern from (B) to (C) to 1 as shown in the chart will probably complete, implying a PT of 2933
Completing the butterfly pattern is also the .786 retrace of the leg from Jun 26 to July 15, which sets up ANOTHER potential butterfly pattern to complete at 2880. Why's this bad? Without nerding out too much about harmonics, butterfly patterns retrace at .786-.886 followed by a bounce, then ultimate end at a lower low between the 1.272-1.424 extension. This is important because unlike Gartleys or Bats that reverse between .786 - 1.0, butterfly reversal zones are always at a lower low. Seeing all these potential butterfly patterns also reaffirms my thesis that we are in the corrective wave of an expanded flat.. where the PT is at the 1.236 extension or greater, pretty close to where butterflies terminate.
Which leads to my previous target of 2870-2880 leading up to the July FOMC meeting which would be the 1.272 retrace of the (A)(B)(C) shown. That target will be reaffirmed if we tap the .786 retrace at 2933 this week.
Note the red box shown in the chart. I believe this is gonna be a massive bulltrap, BUT IF AND ONLY IF price hits 2933 first. People will be buying like mad and covering shorts like crazy because they'll think 1) We're back above the old ATH, 2) We've moved above the (i)(ii) and invalidated the impulse down so the ABC correction is over. In fact, a move to 2988 followed by a close below 2977 would only reaffirm an imminent move down to 2870. This is all conjecture of course, bulls could simply give up the fort at 2977.
I wouldn't pay too much attention to the wave lines I've drawn in the chart, they're there more to estimate pivot points as opposed to trajectory. For instance I have no idea whether wave (v) will terminate before or after the fed meeting or maybe wave (iv) will just be a consolidating premium burning corrective wave.
Komentarz:
Shoulda known that futures were gonna try to take this back up... big money always wants to sell near the top. 3000 is the .886 retrace of friday's leg down and near the .618 of the entire correction. It's the last stand for bears.
Komentarz:
LOL check out how they popped it over my line with "trade news" at the end of RTH then dropped it immediately afterwards on "antitrust probe". The shadiness of it all tells me we're close to an end here of the impulse wave to end this regular flat wave 2 or B and wave 3 or C is ready to begin. Remember in December how the flat ended on "trade truce" and sold off going into the fed meeting? Looking like SSDD here. I wouldn't put it past these crooks to pop it one more time overnight to the top of that channel tho...
